VIRTUAL I-O VIRTUAL-REALITY HEADGEAR
By ERICK SCHONFELD

(FORTUNE Magazine) – SEATTLE Founded 1993 Revenues: N.A. Employees: 150 Private www.vio.com

Three years ago Greg Amadon and Linden Rhoads were pitching their idea to make virtual-reality eyeglasses to fellow Seattle residents Bill Gates, Craig McCaw, and every other techno-tycoon with whom they could finagle an audience. But it wasn't until they lugged 900 pounds of computer and video equipment to Boothbay Harbor, Maine, that they found the perfect investor: John Malone, CEO of Tele-Communications Inc. Amadon and Rhoads spent an evening in his garage setting up the equipment, including a rare 3-D camera borrowed from a Japanese company, to demonstrate an early version of their glasses. Malone saw promise: Here was a technology that could spur 3-D cable channels and VR videogames. TCI became the startup's largest investor.

Unlike the typical bulky headgear that makes virtual-reality aficionados look like giant ants, Virtual i-O's glasses are half-pound lightweights. Once they're put on, stereoscopic images reflected from tiny liquid-crystal displays create the illusion of watching an 80-inch screen 11 feet away. Some models, with head tracking, are used in VR arcades or with PCs. A cheaper version serves as a personal TV screen when hooked up to a VCR or to videogame machines by Nintendo, Sega, or Sony. Says Rhoads: "Every cathode-ray tube is a target."

Surprisingly the company's first customers were dentists. Thousands use the video goggles to distract patients with movies (The Texas Chainsaw Massacre, anyone?) while drilling their molars. Discussions are under way with TCI, Time Warner, DirecTV, and the Discovery Channel about launching a 3-D channel for viewers outfitted with the glasses. CEO Amadon says a major PC maker will soon announce a laptop that employs a version of the glasses in lieu of a screen, making it a fraction of the weight of today's subnotebooks.

--Erick Schonfeld